American ideals, and other essays, social and political

by Theodore Roosevelt

However, Mr. Adams is certainly in error in putting the immense importance he does upon the question of the expansion or contraction of the currency. There is no doubt whatever that a nation is profoundly affected by the character of its currency; but there seems to be equally little doubt that the currency is only one, and by no means the most important, among a hundred causes which profoundly affect it. The United States has been on a gold basis, and on a silver basis; it has been on a paper basis, and on a basis of what might be called the scraps and odds and ends of the currencies of a dozen other nations; but it has kept on developing along the same lines no matter what its currency has been. If a change of currency were so enacted as to amount to dishonesty, that is, to the repudiation of debts, it would be a very bad thing morally; or, if a change took place in a manner that would temporarily reduce the purchasing power of the wage-earner, it would be a very bad thing materially; but the current of the national life would not be wholly diverted or arrested, it would merely be checked, even by such a radical change. The forces that most profoundly shape the course of a nation’s life lie far deeper than the mere use of gold or of silver, the mere question of the appreciation or depreciation of one metal when compared with the other, or when compared with commodities generally.

Mr. Adams unconsciously shows this in his first and extremely interesting chapter on the Romans. In one part of this chapter he seems to ascribe the ruin of the Roman Empire to the contraction of the currency, saying, “with contraction came that fall of prices which first ruined, then enslaved, and finally exterminated the native rural population of Italy.” This he attributes to the growth of the economic or capitalistic spirit. As he puts it, “the stronger type exterminated the weaker, the money-lender killed out the husbandman, the soldiers vanished, and the farms on which they once flourished were left desolate.”

But, curiously enough, Mr. Adams himself shows that all this really occurred during the two centuries, or thereabouts, extending from the end of the second Punic war through the reign of the first of the Roman emperors; and this was a period of currency expansion, not of currency contraction. Moreover, it was emphatically a period when the military and not the economic type was supreme. The great Romans of the first and second centuries before Christ were soldiers, not merchants or usurers, and they could only be said to possess the economic instinct incidentally, in so far as it is possessed by every man of the military type who seizes the goods accumulated by the man of the economic type. It was during these centuries, when the military type was supreme, and when prices were rising, that the ruin, the enslavement and the extermination of the old rural population of Italy began. It was during these centuries that the husbandmen left the soil and became the mob of Rome, clamoring for free bread and the games of the amphitheatre. It was toward the close of this period that the Roman army became an army no longer of Roman citizens, but of barbarians trained in the Roman manner; it was toward the close of this period that celibacy became so crying an evil as to invoke the vain action of the legislature, and that the Roman race lost the power of self-perpetuation. What happened in the succeeding centuries,—the period of the contraction of the currency and the rise of prices,—was merely the completion of the ruin which had already been practically accomplished.

These facts seem to show clearly that the question of the currency had really little or nothing to do with the decay of the Roman fibre. This decay began under one set of currency conditions, and continued unchanged when these conditions became precisely reversed. An infinitely more important cause, as Mr. Adams himself shows, was the immense damage done to the Italian husbandman by the importation of Asiatic and African slaves; which was in all probability the chief of the causes that conspired to ruin him. He was forced into competition with races of lower vitality; races tenacious of life, who possessed a very low standard of living, and who furnished to the great slave-owner his cheap labor. Mr. Adams shows that the husbandman was affected, not only by the importation of vast droves of slaves to compete with him in Italy, but by the competition with low-class labor in Egypt and elsewhere. These very points, if developed with Mr. Adams’s skill, would have enabled him to show in a very striking manner the radical contrast between the present political and social life of civilized states, and the political and social life of Rome during what he calls the capitalistic or closing period. At present, the minute that the democracy becomes convinced that the workman and the peasant are suffering from competition with cheap labor, whether this cheap labor take the form of alien immigration, or of the importation of goods manufactured abroad by low-class working-men, or of commodities produced by convicts, it at once puts a stop to the competition. We keep out the Chinese, very wisely; we have put an end to the rivalry of convict contract labor with free labor; we are able to protect ourselves, whenever necessary, by heavy import duties, against the effect of too cheap labor in any foreign country; and, finally, in the civil war, we utterly destroyed the system of slavery, which really was threatening the life of the free working-man in a way in which it cannot possibly be threatened by any conceivable development of the “capitalistic” spirit.

Mr. Adams possesses a very intimate knowledge of finance, and there are many of his discussions on this subject into which only an expert would be competent to enter. Nevertheless, on certain financial and economic questions, touching matters open to discussion by the man of merely ordinary knowledge, his terminology is decidedly vague. This is especially true when he speaks of “the producer.” Now the producer, as portrayed by the Populist stump orator or writer of political and economic pamphlets, is a being with whom we became quite intimate during the recent campaign; but we have found it difficult to understand at all definitely who this “producer” actually is. According to one school of Populistic thinkers the farmer is the producer; but according to another and more radical school this is not so, unless the farmer works with his hands and not his head, this school limiting the application of the term “producer” to the working-man who does the immediate manual work of production. On the other hand those who speak with scientific precision must necessarily class as producers all men whose work results directly or indirectly in production. Under this definition, inventors and men who improve the methods of transportation, like railway presidents, and men who enable other producers to work, such as bankers who loan money wisely, are all themselves to be classed as producers, and often indeed as producers of the most effective kind.

The great mass of the population consists of producers; and in consequence the majority of the sales by producers are sales to other producers. It requires one set of producers to make a market for any other set of producers; and in consequence the rise or fall of prices is a good or a bad thing for different bodies of producers according to the different circumstances of each case. Mr. Adams says that the period from the middle of the twelfth to the middle of the thirteenth centuries was an interval of “almost unparalleled prosperity,” which he apparently ascribes to the expansion of the currency, with which, he says, “went a rise in prices, all producers grew rich, and for more than two generations the strain of competition was so relaxed that the different classes of the population preyed upon each other less savagely than they are wont to do in less happy times.” It is not exactly clear how a rise in the prices both of what one producer sells another, and of what he in return buys from that other, can somehow make both of them rich, and relax the strain of competition. Certainly in the present century, competition has been just as severe in times of high prices; and some of the periods of greatest prosperity have coincided with the periods of very low prices. There is reason to believe that low prices are ultimately of great benefit to the wage-earners. A rise in prices generally injures them. Moreover, in the century of which Mr. Adams speaks, the real non-producers were the great territorial feudal lords and the kings and clergymen; and these were then supreme. It was the period of the ferocious Albigensian crusades. It is true that it ushered in a rather worse period,—that of the struggle between England and France, with its attendant peasant wars and Jacqueries, and huge bands of marauding free-companies. But the alteration for the worse was due to a fresh outbreak of “imaginative” spirit; and the first period was full of recurring plagues and famines, besides the ordinary unrest, murder, oppression, pillage, and general corruption. Mr. Adams says that the different classes of the population during that happy time “preyed upon each other less savagely” than at other times. All that need be said in answer is that there is not now a civilized community, under no matter what stress of capitalistic competition, in which the different classes prey upon one another with one-tenth the savagery they then showed; or in which famine and disease, even leaving war out of account, come anywhere near causing so much misery to poor people, and above all to the wage-earners, or working-men, the under strata and base of the producing classes.

From many of the statements in Mr. Adams’s very interesting concluding chapter I should equally differ; and yet this chapter is one which is not merely interesting but soul-stirring, and it contains much with which most of us would heartily agree. Through the cold impartiality with which he strives to work merely as a recorder of facts, there break now and then flashes of pent-up wrath and vehement scorn for all that is mean and petty in a purely materialistic, purely capitalistic, civilization. With his scorn of what is ignoble and base in our development, his impatient contempt of the deification of the stock-market, the trading-counter, and the factory, all generous souls must agree. When we see prominent men deprecating the assertion of national honor because it “has a bad effect upon business,” or because it “impairs the value of securities”; when we see men seriously accepting Mr. Edward Atkinson’s pleasant theory that patriotism is of no consequence when compared with the price of cotton sheeting or the capacity to undersell our competitors in foreign markets, it is no wonder that a man who has in him the stuff of ancestors who helped to found our Government, and helped to bring it safely through the Civil War should think blackly of the future. But Mr. Adams should remember that there always have been men of this merely huckstering type, or of other types not much higher. It is not a nice thing that Mr. Eliot, the president of one of the greatest educational institutions of the land, should reflect discredit upon the educated men of the country by his attitude on the Venezuela affair, carrying his desertion of American principles so far as to find himself left in the lurch by the very English statesman whose cause he was championing; but Mr. Adams by turning to the “History” of the administration of Madison, by his brother, Henry Adams, would find that Mr. Eliot had plenty of intellectual ancestors among the “blue lights” federalists of that day. Timothy Pickering showed the same eager desire to stand by another country to the hurt of his own country’s honor, and Timothy Pickering was a United States Senator whose conduct was far more reprehensible than that of any private individual could be. We have advanced, not retrograded, since 1812.

This applies also to what Mr. Adams says of the fall of the soldier and the rise of the usurer. He quite overstates his case in asserting that in Europe the soldier has lost his importance since 1871, and that the administration of society since then has fallen into the hands of the “economic man,” thereby making a change “more radical than any that happened at Rome or even at Byzantium.” In the first place, a period of a quarter of a century is altogether too short to admit of such a generalization. In the next place, the facts do not support this particular generalization. The Germans are quite as military in type as ever they were, and very much more so than they were at any period during the two centuries preceding Bismarck and Moltke. Nor is it true to say that “the ruler of the French people has passed for the first time from the martial to the moneyed type.” Louis XV. and Louis Philippe can hardly be held to belong to any recognized martial type; and the reason of the comparative sinking of the military man in France is due not in the least to the rise of his economic fellow-countryman, but to the rise of the other military man in Germany. Mr. Adams says that since the capitulation of Paris the soldier has tended to sink more and more, until he merely receives his orders from financiers (which term when used by Mr. Adams includes all business and working-men) with his salary, without being allowed a voice, even in the questions which involve peace and war. Now this is precisely the position which the soldier has occupied for two centuries among English-speaking races; and it is during these very centuries that the English-speaking race has produced its greatest soldiers. Marlborough and Wellington, Nelson and Farragut, Grant and Lee, exactly fill Mr. Adams’s definition of the position into which soldiers have “sunk”; and the United States has just elected as President, as it so frequently has done before, a man who owes his place in politics in large part to his having done gallant service as a soldier, and who is in no sense a representative of the moneyed type.

Again, Mr. Adams gloomily remarks that “producers have become the subjects of the possessors of hoarded wealth,” and that among capitalists the money-lenders form an aristocracy, while debtors are helpless and the servants of the creditors. All this is really quite unworthy of Mr. Adams, or of anyone above the intellectual level of Mr. Bryan, Mr. Henry George, or Mr. Bellamy. Any man who has had the slightest practical knowledge of legislation, whether as Congressman or as State legislator, knows that nowadays laws are passed much more often with a view to benefiting the debtors than the creditors; always excepting that very large portion of the creditor class which includes the wage-earners. “Producers”—whoever they may be—are not the subjects of “hoarded wealth,” nor of anyone nor anything else. Capital is not absolute; and it is idle to compare the position of the capitalist nowadays with his position when his workmen were slaves and the law-makers were his creatures. The money-lender, by whom I suppose Mr. Adams means the banker, is not an aristocrat as compared to other capitalists,—at any rate in the United States. The merchant, the manufacturer, the railroad man, stand just as the banker does; and bankers vary among themselves just as any other business men do. They do not form a “class” at all; anyone who wishes to can go into the business; men fail and succeed in it just as in other businesses. As for the debtors being powerless, if Mr. Adams knows any persons who have lent money in Kansas or similar States they will speedily enlighten him on this subject, and will give him an exact idea of the extent to which the debtor is the servant of the creditor. In those States the creditor—and especially the Eastern money-lender or “gold-bug”—is the man who has lost all his money. Mr. Adams can readily find this out by the simple endeavor to persuade some “money-lender,” or other “Wall Street shark” to go into the business of lending money on Far-Western farm property. The money-lender in the most civilized portions of the United States always loses if the debtor is loser, or if the debtor is dishonest. Of course there are “sharpers” among bankers, as there are among producers. Moreover, the private, as distinguished from the corporate, debtor borrows for comparatively short periods, so that he is practically not at all affected by an appreciating currency; the rise is much too small to count in the case of the individual, though it may count in the long-term bonds of a nation or corporation. The wage of the working-man rises, while interest, which is the wage of the capitalist, sinks.

Mr. Adams’s study of the rise of the usurer in India and the ruin of the martial races is very interesting; but it has not the slightest bearing upon anything which is now happening in Western civilization. The debtor, in America at least, is amply able to take care of his own interests. Our experience shows conclusively that the creditors only prosper when the debtors prosper, and the danger lies less in the accumulation of debts, than in their repudiation. Among us the communities which repudiate their debts, which inveigh loudest against their creditors, and which offer the poorest field for the operations of the honest banker (whom they likewise always call “money-lender,”) are precisely those which are least prosperous and least self-respecting. There are, of course, individuals here and there who are unable to cope with the money-lender, and even sections of the country where this is true; but this only means that a weak or thriftless man can be robbed by a sharp money-lender just as he can be robbed by the sharp producer from whom he buys or to whom he sells. There is, in certain points, a very evident incompatibility of interest between the farmer who wishes to sell his product at a high rate, and the working-man who wishes to buy that product at a low rate; but the success of the capitalist, and especially of the banker, is conditioned upon the prosperity of both working-man and farmer.